Most Asian Markets Fall on Bleak Earnings

By STEPHEN WRIGHT
|  Tuesday, Feb 3, 2009  |  Updated 4:02 PM EDT
View Comments (
)
|
Email
|
Print
Most Asian Markets Fall on Bleak Earnings

AP

Asian markets remain chilled Monday. The benchmark Nikkei 225 stock index 173.02 points to 7,821.03 during the morning trading.

advertisement

Most Asian markets sank Monday as investors digested a stew of awful earnings reports from the region's corporate heavyweights and inauspicious signs from Wall Street, where stock averages clocked their worst January ever.

Japan's Nikkei 225 stock average was down 164.93, or 2 percent, at 7,832.04, Hong Kong's Hang Seng slid 2.8 percent to 12,912.98 and South Korea's Kospi was off 1.6 percent at 1,143.89. Markets in Australia, Singapore, and India fell 1 percent or more.

Mainland China's market, reopening after the weeklong Lunar New Years holiday, rose modestly. The Shanghai Composite index was up 0.6 percent at 2,002.32.

Sentiment was shaky after big name Japanese companies like Honda, NEC and Hitachi announced dire quarterly results on Friday and data showed the U.S. economy shrank at a 3.8 percent pace in fourth quarter.

For investors, it was academic that the contraction in the world's largest economy wasn't as bad as expected since many forecasters believe gross domestic product is already shrinking at an even faster pace in the first quarter of this year.

Adding to the gloom, the Dow Jones industrial average and Standard & Poor's 500 index posted record percentage drops for January — 8.8 percent and 8.6 percent, respectively. Some market watchers believe that's a bad omen for the rest of the year, as the market usually ends a year down after having fallen in January.

"The spotlight is on the economy and earnings and doubts about when the recovery in the U.S. will materialize," said Song Seng Wun, head of research at CIMB-GK in Singapore. "We are likely to continue experiencing bouts of optimism alternated with periods of uncertainty. Tomorrow the markets could be racing ahead."

"But once the dust has settled from the current earnings season, it may set the stage for investors to look at the markets from a fundamental perspective and decide that stock prices fallen enough," he said.

In Tokyo, blue chip stocks continued to wilt as investors braced for more earnings shocks after last week's reports showed the country's exporters had been hammered by the global economic downturn and strong yen.

Hitachi Ltd., which makes everything from home appliances to medical equipment, dived 16.7 percent after forecasting a loss of 700 billion yen ($7.7 billion) for its fiscal year ending March and a plan to slash about 7,000 jobs. It announced quarterly results Tuesday.

Honda Motor Co., which reported a 90 percent slump in October-December profit, was down 1.9 percent.

Electronics giant NEC Corp. slid 6.1 percent in the aftermath of announcing its quarterly loss swelled to 130 billion yen ($1.46 billion) and a plan to cut 20,000 jobs worldwide in the coming year.

Panasonic Corp. and Mazda Motor Corp. release earnings on Wednesday.

On Wall Street, the Dow Jones industrial average fell 148.55, or 1.8 percent, to 8,000.46 on Friday. The Standard & Poor's 500 index fell 19.26, or 2.3 percent, to 825.88, and the Nasdaq composite index fell 31.42, or 2.1 percent, to 1,476.42.

U.S. stock futures were down modestly, pointing to weaker open Monday.

Oil prices hovered below $42 a barrel in Asia as investors weighed the threat of an oil worker strike in the U.S. against the prospect of more bad economic news this week. Light, sweet crude for March delivery dipped 7 cents to $41.61 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange.

Get the latest headlines sent to your inbox!
View Comments (
)
|
Email
|
Print
Leave Comments
What's New
Follow us on Instagram!
We post photos taken by our news... Read more
Follow Us
Sign up to receive news and updates that matter to you.
Send Us Your Story Tips
Check Out